Chapter 10 by Markusen and Zahniser argues that NAFTA and more recent regional trade agreements (RTAs) have a different focus to the older agreements, which were essentially concerned with trying to achieve large internal markets to capture economies of scale. Among the reasons for such agreements, which also now involve countries with different levels of development, might be the motive to reduce immigration pressures since migrants from LDCs may create various kinds of social and economic problems in the developed country. If this is indeed a motive for NAFTA, it is rather ironic that in all these regional agreements one of the important clauses is the freeing up of cross-border migration and trade. This is yet another example of the gap between rhetoric and practice. The chapter goes on to consider the theoretical link between trade and investment liberalisation on the one hand and the incentives for the migration of less-skilled labour on the other. Will there be a convergence of wages between Mexico and the USA, and hence less migration? Putting this proposition another way, will trade and investment substitute for migration?

The chapter postulates four particular reasons that the USA had for forming NAFTA, one of which is to improve the Mexican wages of unskilled workers to reduce pressures on migration to the USA. The other three reasons, which appear more substantial and achievable, are: provide a low-wage partner for US firms to compete with third-world suppliers and Japanese multinationals, set an example of speed in multinational negotiations and help Mexico lock in its economic reforms.